AHP4100 - The Gateway process: handling strategies and Gateways

Handling strategies

Policy owners are responsible for assessing the level of risk posed to their parts of the tax system by a newly identified avoidance risk, and for developing and agreeing a strategy for handling that risk in collaboration with relevant stakeholders. The policy owner must inform AAB Secretariat of all new handling strategies agreed so that they can sight AAB on emerging avoidance risks.

As noted in AHP3300 it is essential that the Department has a complete picture of all avoidance, so all new and suspected avoidance risks must be referred to AAB Secretariat.

The handling strategy:

  • describes the nature of the risk, linking it to other known risks in a similar field where appropriate
  • seeks to identify the likely scale of the risk, that is the number and nature of the participants, the tax potentially at risk based on the available intelligence, and the scope for further expansion of the risk
  • proposes how best HMRC might deal with the risk

Handling strategy proposals may include one of the following:

  • an upstream solution, including a legislative fix
  • an upstream solution and operational response
  • operational response only
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • undertake more work
  • no response, where there is no avoidance present

Other options may also be put forward as handling strategies.

Gateways

Underpinning the governance of avoidance is a series of Gateways. These work as follows:

  • Gateway 1; the policy owner, as AAB’s delegated authority, determines a handling strategy for a new risk
  • Gateway 1A: the policy owner can change the handling strategy agreed at Gateway 1 where necessary, for example because the size of the risk has changed significantly, or it has become considerably more/ less technical in nature
  • Gateway 2: AAB considers and determines the parameters for settlement put forward by the operational team in consultation with the policy owner and relevant stakeholders; the proposals must be authorised at SCS level
  • Gateway 2A: AAB considers proposals for revised settlement strategies where required; proposals must be authorised at SCS level

Gateway 1 and 1A submissions to the policy owner should be made on the ‘Handling Strategy’ tab of the Avoidance Risk Governance Document (ARGD) for the risk. Gateway 2 and 2A submissions should be made on the template which can be obtained by e-mailing AAB Secretariat.